Learn how to calculate and reduce dimensional weight to lower shipping costs and improve margins.
Learn how to calculate and reduce dimensional weight to lower shipping costs and improve margins.
DIM weight is a formula used by carriers to determine the cost of shipping a package first implemented by UPS, FedEx, and USPS in 2015. Prior to 2015, shipping costs were largely calculated based on weight and time in transit through shipping zones.The heavier the package and/or further it traveled, the more expensive it would be to ship. However, when DIM weight is calculated, it takes into account the package’s volume.
Have you ever been asked the riddle, What weighs more, one hundred pounds of feathers or one hundred pounds of gold?
The answer is that they both weigh the same- one hundred pounds- but that’s not true when it comes to dimensional weight.
For example, consider a low weight, high volume item like a box of cotton balls. While the box weighs relatively little, it takes up a disproportionate amount of space.
With the explosion of multichannel eCommerce, carriers realized their pricing technique left out a crucial component – the finite amount of storage space in their trains, aircraft, trucks, shipping containers. A van can reach capacity quickly with very little weight. This means that the cost of shipping cotton balls could actually be higher than transporting dumbbells.
As eCommerce booms, small to midsize businesses (SMBs) calculate DIM weight and use logistics data to optimize logistics networks and maintain a resilient fulfillment strategy.
Dimensional weight is calculated by multiplying the length, width, and height of a package to determine its volume, or cubic size. For instance, a parcel 12 inches by 18 inches by 18 inches is 3,888 cubic inches.
Then, the volume, or cubic size, of the package is divided into the carrier’s dimensional factor, also known as the DIM factor or DIM divisor. Fractions are rounded up to the next whole pound.
DIM factor, or DIM divisor, is a number used by carriers to calculate the dimensional weight of a square or rectangular package. A higher DIM divisor generally means a lower DIM weight and cost.
In other words, DIM factor represents the volume of a package per unit of weight, also referred to as cubic inches per pound, and is used to quickly determine the dimensional weight of any cubical parcel.
For example, UPS uses a DIM factor of 166 for merchants paying retail rates and 139 for shops paying daily rates.
Whether fulfilment is handled in-house or outsourced, dimensional weight is a key component of shipping fees – one of eCommerce sellers’ largest expenses.
Accordingly, properly calculating dimensional weight, also called DIM weight or volumetric weight, and taking a strategic approach to decrease it, will reduce shipping costs. The resulting higher profits can be reinvested back into the business to meet consumers’ expectation for free 1-2-day shipping and take further action to minimize shopping cart abandonment rates.
Below are answers to frequently asked questions about calculating dimensional weight and decreasing DIM weight.
Dimensional pricing is the cost to ship a package based on its volume, or dimensional weight. Carriers incorporate DIM weight into their pricing structure because the number of packages that can be transported depends on weight and the size of the boxes.
Consequently, carriers will charge freight fees based on whichever is greater: DIM weight or the physical weight of the package. Pricing for a small, heavy product like a bowling ball or YBell would be based on actual weight, whereas DIM weight would be used for a large, lightweight item like a pillow.
As such, small and heavy packages typically use actual weight more often, while DIM weight comes into play more with large and light packages due to their high volume.
Here are 3 ways to decrease dimensional weight:
Match Packaging to Merchandise’s Size and Fragility
Often this means switching from standard to well-designed custom packaging, which also saves money on package fillers like bubble wrap, shredded paper, and packaging peanuts. Besides reducing DIM weight, using custom packaging increases the rate of items arriving safely and intact, boosting customer loyalty and repeat business. HyVIDA, the world’s first hydrogen-infused carbonated beverage, experienced this first-hand after updating packaging to combat damage issues as part of improving their entire fulfilment process.
Utilize Poly or Padded Mailers
Even collapsed boxes take up lots of space. On the other hand, poly and padded mailers make way for more inventory, resulting in dramatically lower DIM weight. Plus, they’re more eco-friendly and can be custom-printed, improving the branded shipping experience. Further, from a warehouse optimization perspective, padded and poly mailers do not require the assembly that boxes do, so shipments can be packed faster and more efficiently, as well.
Align with an Outsourced Order Fulfilment Provider
Besides negotiating service level agreements (SLAs) to guarantee nationwide 2-day delivery, fourth-party logistics (4PL) providers deliver value throughout the entire fulfillment process. The right 4PL should optimize pack pick and ship and return processes to reduce DIM weight and cut shipping costs.
Example: See how Ware2Go’s flexible business model and warehouse network fit into HyVIDA’s multichannel growth strategy, while the 4PL’s packaging SOPs reduced the beverage maker’s damages to zero.
Decreasing dimensional weight is an important part of reducing the overall cost of shipping and increasing profits. To learn more about how Ware2Go’s on-demand fulfilment structure can help you reduce dimensional weight and shipping costs, please reach out to one of our shipping optimization experts.